Innovative Industrial Properties (NYSE:IIPR), a cannabis industry-focused real estate investment trust (REIT), is slated to report its fourth-quarter and full-year 2019 results after the market closes on Wednesday, Feb. 26.

Despite pulling back since peaking in mid-2019, the company's stock has returned a whopping 68.8% over the one-year period through Friday, Feb. 14. For context, over this same period, the S&P 500 has returned 25.6%, while shares of Canopy Growth, Cronos, and Aurora Cannabis -- the three largest Canadian marijuana growers by market cap -- have dropped 52%, 64.8%, and 77.8%, respectively. 

Given Innovative Industrial Properties stock's robust recent performance (it's returned 30.4% in 2020 through Friday, versus the broader market's nearly 5% return) and lofty valuation (its price-to-earnings ratio is 68.5), investors will be expecting the company to continue to deliver rapid growth on both the top and bottom lines.

The day after the company released its third-quarter results, IIP stock popped 10%, thanks to revenue and earnings sailing by Wall Street's expectations. Investors are surely hoping for a repeat. 

Here's what to watch and expect in IIP's report.

Marijuana plants in a greenhouse.

Image source: Getty Images.

Innovative Industrial Properties' key quarterly numbers

Here are IIP's results from the year-ago quarter and Wall Street's estimates to use as benchmarks.

Metric

Q4 2018 Result

Wall Street's Q4 2019 Consensus Estimate

Wall Street's Projected Change

Revenue

$4.78 million

$14.37 million

201%

Earnings per share (EPS)

$0.24

$0.57 138%

Adjusted funds from operations (FFO)

$0.38 N/A N/A

Data sources: Innovative Industrial Properties and Yahoo! Finance. Funds from operations (FFO) is a closely watched metric for companies organized as REITs. It adds depreciation expense back to net income and makes a few other adjustments to net income to accurately reflect a REIT's cash flow.

While long-term investors shouldn't place too much weight on the Street's near-term estimates, they're helpful to know because they often help explain market reactions.

Analysts are expecting continued torrid growth, thanks primarily to IIP's acquisition activity. At the end of the year-ago quarter, the company owned just 11 properties in 11 U.S. states where marijuana for medical use is legal. At the end of the fourth quarter of 2019, it owned 44 properties in 14 U.S. states, according to my review of the company's press releases. (As of Feb. 14, that total has increased to 47 properties located in 15 states.) The properties are 100% leased under long-term, triple-net leases.  

For financial performance context, in the third quarter, IIP's net rental revenue soared 201% year over year to $11.2 million, driven primarily by the acquisition of new properties, along with contractual rental increases at certain properties. Profitability metrics also performed wonderfully, with EPS rocketing 162% to $0.55, and adjusted FFO per share jumping 126% to $0.86. Both the top and bottom lines easily beat Wall Street's expectations, resulting in the stock notching a 10% gain on the day following the earnings release. 

IIP's year-over-year revenue growth rate has been accelerating, as it was 155% in the second quarter, 146% in the first quarter, and 111% in the fourth quarter of 2018. 

Earnings call on Feb. 27

Innovative Industrial Properties has scheduled an analyst conference call for the day after the earnings release, Thursday, Feb. 27, at 1 p.m. EST. (Yep, you read that unusual time correctly.) 

I encourage investors and potential investors to tune in live or listen to the recorded version at their leisure, as the calls are always meaty.